Countdown to Interest Rate Cuts? The Federal Reserve is in Turmoil, Major Actions Possible in September!
This time, the Federal Reserve meeting did not have any major actions, and the interest rate remains at 4.25%-4.5%, having stayed unchanged for four consecutive times. They are now focused on inflation and employment data, waiting to see when they can cut rates.
The dot plot indicates that interest rates may drop to 3.9% by the end of 2025, equivalent to two cuts of 25 basis points each, but the number of supporters for not cutting rates has increased, suggesting a slight hawkish tendency within.
A new change in this meeting is that the Federal Reserve officially mentioned for the first time that tariffs could push up inflation, as importers stockpile in advance, possibly leading to another wave of price increases.
In terms of the economy, GDP growth has slowed to 1.4%, and the unemployment rate may rise to 4.5%. Inflation is still stuck at 3%—in simple terms, the economy is slowing down, but prices remain high, giving a sense of stagflation.
Currently, the market is most concerned about whether there will be an interest rate cut in September. As it stands, the probability of cutting rates twice by 25 basis points each is the highest, unless inflation surges again. The risk of recession is low, but the economy is indeed cooling down, so the Federal Reserve is not in a hurry to cut rates.
The inflation data for July and August, service prices, and wage growth will be particularly crucial. If the data remains decent, there may still be two rate cuts this year. In summary, the Federal Reserve is currently holding steady, waiting for more data to make a decision.
Next, I will continue to arrange for strategic orders. Instead of blindly exploring and being unable to capture the best entry and exit points, which could lead to holding losses, it is better to follow me and those who agree with this directly.
